Lack of public projects and fierce competition in regional markets blamed for 23% drop in UK construction revenue
Balfour Beatty’s UK construction arm has reported a 23% fall in revenue in the first four months of 2013.
In an update to the City the firm said the poor performance in the UK had been responsible for a 11% drop in the group’s construction revenues, when compared with the same period of 2012.
It said the UK market continued “to be adversely impacted by the shortage of major public projects and fierce competition in the regional markets”.
Balfour Beatty said the UK construction business was expected to break even in 2013.
In April the firm issued a £50m profit warning for the UK construction business, which followed a warning in its full-year results that it expected to bring in revenue around £2.55bn, down 20% from its revenue in 2012.
This morning the firm said: “As we progress through the year, our business is expected to benefit from the cost efficiency programmes we have in place, a recovery in operational performance in UK construction and the ongoing implementation of strategic initiatives.
“Based on these dynamics and the first half weighting of the profit shortfall in UK construction, we expect our profits to be more heavily skewed to the second half than in previous years.”
However, Balfour Beatty’s US construction business reported “stable” revenues and a “strong order book” and the firm said it’s Dubai and Hong Kong arms were also on track to deliver management’s expectations.
It said that signed orders in the US had helped it increase its group order book by 5% over the period.
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